August 14, 2012:
The Chinese Navy is becoming larger, more frequently seen far from China, and scarier. But China still has what is essentially a coastal navy. To become really terrifying, and not just a lot bigger, the Chinese have to do certain things.
Most importantly, Chinese ships must be at sea a lot more. For centuries modern warships have become far more effective (compared to similar ships used by their opponents) if the crews have a lot more time at sea. During the last decade Chines sailors have gone from hardly any time at sea, to some crews spending a lot of time out there. Much of this has come from Chinese participation in the Somalia anti-piracy patrol. China has been participating in this operation since 2008. Each Chinese "naval escort task force" consists of one or two destroyers or frigates and one or two supply ships. A typical task force for the Somali coast contains about 800 sailors. Each task force spends four months off the Somali coast. Only a few task forces have been from the North China Sea fleet. Most have been drawn from the other two fleets (The East Sea and The South Sea).
Service in the Somali task forces is eagerly sought after because it is the most intensive and extensive training available. The task force gets practice in long distance cruises (Somalia is 10,000 kilometers distant and it takes two weeks to get there) and combat operations. Granted, the enemy rarely fires back and is hard to find. But the crews are able to operate for long periods on the high seas and search for an elusive foe.
There are 74 destroyers and frigates in the Chinese Navy, and it will take another 4-5 years for all of these ships to have an opportunity to serve off Somalia. But the important thing is that thousands of sailors have served on the task force and they eventually spread throughout the fleet, providing a higher degree of skill and experience at sea they can share. The value of this experience is percolating up the chain of command, where it might help in keeping the admirals and their bean counters willing to support continued sea time for their sailors. This is expensive but it's key to victory in wartime.
Another thing China has to overcome is the mindset of a coastal navy. For thousands of years China has been content to have little more than a coast guard, mainly to deal with pirates and smugglers. On only a few occasions was there a high seas (or "blue water") fleet. But to protect its growing overseas trade, something China has never had before, China needs a blue water navy. To get one requires not just experienced sailors but support ships. These are the tankers, supply, and maintenance ships that can keep warships operational when they are far from China. When China starts investing in a lot of these you will know the Chinese are getting serious.
China also has some more fundamental needs. For example, China has never demonstrated any talent or enthusiasm for anti-submarine warfare. Considering the number of nuclear and conventional subs arrayed against it, anti-submarine warfare should have higher priority in China. Another serious shortcoming is mine-clearing capability. The Chinese Navy is well equipped to plant mines off hostile shores and in defense of its own waters but there is not a lot of capability to clear enemy mines. Many navies share this shortcoming but for a major trading nation like China, it would be sad to see all that trade shut down by a few hundred naval mines.